FTI Consulting, Inc. (FCN - Free Report) reported impressive third-quarter 2023 results, with both earnings and revenues beating the Zacks Consensus Estimate. The better-than-expected results, however, failed to impress the market as there has not been any major price change since the earnings release.
Adjusted earnings per share of $2.34 beat the consensus mark by 27.2% and increased 8.8% on a year-over-year basis. Total revenues of $893.3 million surpassed the consensus mark by 5.4% and jumped 15.1% on a year-over-year basis.
Quarterly Numbers in Detail
Forensic and Litigation Consulting revenues rose 15.9% year over year to $166.1 million but missed our estimate of $177 million. The uptick was primarily driven by higher demand for investigations, data & analytics, and construction solutions services.
Strategic Communications revenues climbed 19.9% year over year to $86.8 million and outpaced our prediction of $78.7 million. The upside can be attributed to higher demand for corporate reputation and public affairs services.
Technology revenues raised 25.3% year over year to $97.4 million and outshined our anticipation of $91.5 million. Higher demand for investigations and litigation services resulted in this improvement.
Economic Consulting revenues of $193.9 million inched up marginally year over year and managed to surpass our projection of $193 million. This can be attributed to an augmentation in international arbitration and M&A-related antitrust revenues.
Corporate Finance & Restructuring revenues gained 23.2% year over year to $347.6 million and topped our estimate of $303.6 million. The upward movement was primarily due to higher realized bill rates, and demand for restructuring, and business transformation & strategy services as well as an increase in success fees.
Operating Results
Adjusted EBITDA came in at $118.7 million, up 20% on a year-over-year basis. This compared favorably with our expectation of $101.1 million, up 2.2% year over year.
Adjusted EBITDA margin expanded 50 basis points year over year to 13.3%. This compared favorably with our expectation of an adjusted gross profit margin of 12%.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $201.1 million compared with the prior quarter’s $203.5 million. Long-term debt was $285 million compared with $340.5 million witnessed at the previous-quarter end. FCN used $106.7 million of net cash in operating activities. CapEx was $14.1 million.
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2023 Guidance
FCN is raising the lower end of its full-year 2023 guidance ranges for revenues and EPS.
FCN now estimates revenues for full-year 2023 will range between $3.350 billion and $3.400 billion (prior view: $3.330-$3.400 billion). The midpoint of the guided range ($3.375 billion) is above the Zacks Consensus Estimate of $3.36 billion.
Management now envisions full-year 2023 EPS to be between $6.70 and $7.20 (earlier guidance: $6.50-$7.20). The midpoint of the guided range ($6.95) is above the Zacks Consensus Estimate of $6.74.
FTI Consulting does not currently expect Adjusted EPS to differ from EPS.
Recent Earnings Snapshots of Some Service Providers
The Interpublic Group of Companies, Inc. (IPG - Free Report) posted third-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
IPG’s adjusted earnings of 70 cents per share lagged the consensus estimate by 6.7%. The bottom line, however, climbed 11.1% on a year-over-year basis. Net revenues of $2.31 billion fell short of the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%. Yet, the metric rose 1.7% from a year ago.
EFX’s total revenues of $1.32 billion missed the consensus estimate by 0.7%. Nonetheless, the figure gained 6% from a year ago on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings per share of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and jumped 8.2% year over year.
FI’s organic revenue growth was 12% in the quarter. This was driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
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FTI Consulting, Inc. (FCN - Free Report) reported impressive third-quarter 2023 results, with both earnings and revenues beating the Zacks Consensus Estimate. The better-than-expected results, however, failed to impress the market as there has not been any major price change since the earnings release.
Adjusted earnings per share of $2.34 beat the consensus mark by 27.2% and increased 8.8% on a year-over-year basis. Total revenues of $893.3 million surpassed the consensus mark by 5.4% and jumped 15.1% on a year-over-year basis.
Quarterly Numbers in Detail
Forensic and Litigation Consulting revenues rose 15.9% year over year to $166.1 million but missed our estimate of $177 million. The uptick was primarily driven by higher demand for investigations, data & analytics, and construction solutions services.
Strategic Communications revenues climbed 19.9% year over year to $86.8 million and outpaced our prediction of $78.7 million. The upside can be attributed to higher demand for corporate reputation and public affairs services.
Technology revenues raised 25.3% year over year to $97.4 million and outshined our anticipation of $91.5 million. Higher demand for investigations and litigation services resulted in this improvement.
Economic Consulting revenues of $193.9 million inched up marginally year over year and managed to surpass our projection of $193 million. This can be attributed to an augmentation in international arbitration and M&A-related antitrust revenues.
Corporate Finance & Restructuring revenues gained 23.2% year over year to $347.6 million and topped our estimate of $303.6 million. The upward movement was primarily due to higher realized bill rates, and demand for restructuring, and business transformation & strategy services as well as an increase in success fees.
Operating Results
Adjusted EBITDA came in at $118.7 million, up 20% on a year-over-year basis. This compared favorably with our expectation of $101.1 million, up 2.2% year over year.
Adjusted EBITDA margin expanded 50 basis points year over year to 13.3%. This compared favorably with our expectation of an adjusted gross profit margin of 12%.
Balance Sheet and Cash Flow
FTI Consulting exited the quarter with cash and cash equivalents of $201.1 million compared with the prior quarter’s $203.5 million. Long-term debt was $285 million compared with $340.5 million witnessed at the previous-quarter end. FCN used $106.7 million of net cash in operating activities. CapEx was $14.1 million.
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2023 Guidance
FCN is raising the lower end of its full-year 2023 guidance ranges for revenues and EPS.
FCN now estimates revenues for full-year 2023 will range between $3.350 billion and $3.400 billion (prior view: $3.330-$3.400 billion). The midpoint of the guided range ($3.375 billion) is above the Zacks Consensus Estimate of $3.36 billion.
Management now envisions full-year 2023 EPS to be between $6.70 and $7.20 (earlier guidance: $6.50-$7.20). The midpoint of the guided range ($6.95) is above the Zacks Consensus Estimate of $6.74.
FTI Consulting does not currently expect Adjusted EPS to differ from EPS.
Recent Earnings Snapshots of Some Service Providers
The Interpublic Group of Companies, Inc. (IPG - Free Report) posted third-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
IPG’s adjusted earnings of 70 cents per share lagged the consensus estimate by 6.7%. The bottom line, however, climbed 11.1% on a year-over-year basis. Net revenues of $2.31 billion fell short of the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%. Yet, the metric rose 1.7% from a year ago.
EFX’s total revenues of $1.32 billion missed the consensus estimate by 0.7%. Nonetheless, the figure gained 6% from a year ago on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings per share of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and jumped 8.2% year over year.
FI’s organic revenue growth was 12% in the quarter. This was driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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